Companies & Industries

George Costanza, Double Dipping, and Asbestos-Injury Claims

The fictional television philosopher and sometime-sports executive George Costanza saw nothing wrong with double dipping. That was in the context of potato chips and party dip. When it comes to asbestos-injury claims, some Republican members of Congress fear that double dipping leads to serious fraud.

This week, at the behest of Republicans, the House is expected to debate and vote on the Furthering Asbestos Claim Transparency (FACT) Act. The bill would require asbestos trusts around the country to file quarterly public reports about who receives payments and how much they get. Supporters say that reporting will help prevent unscrupulous plaintiffs’ lawyers and their clients from double dipping—making more than one claim for the same injury. Opponents counter that the law would invade claimants’ privacy as part of a broader attempt to slow payments and protect corporate interests.

Over the past three decades, hundreds of thousands of claims related to illnesses and deaths linked to asbestos insulation have driven scores of companies into bankruptcy. In 1994, Congress passed legislation allowing debtor companies to set up claims-payment trusts as part of the process of reorganizing their business affairs and preventing endless litigation. About 60 such trusts exist and currently hold billions of dollars.

On its face, the FACT Act serves the common sense aim of ensuring that funds intended for legitimate future victims aren’t dispersed now in response to abusive claims. The Wall Street Journal published an interesting piece in March suggesting that such fraud is a real problem.

Advocates for asbestos victims argue that the FACT Act is a solution in search of a problem—and a devious pseudo-solution at that. The Asbestos Disease Awareness Organization has this to say in a press release:

The FACT Act is designed to make it even more difficult for asbestos victims to receive justice in court and hold asbestos corporations responsible for the harm their products have caused. It would also violate asbestos victims’ privacy by releasing sensitive information on a public website.

While one certainly wants to see innocent sick people compensated and cared for, it’s difficult to understand why transparency hinders those ends. The companies that actually manufactured products containing asbestos, for the most part, were forced years ago to reorganize in bankruptcy court, with huge portions of their assets set aside for victims.

As for privacy, it’s conventional for plaintiffs who make demands via the court system to do so publicly. Open proceedings promote honesty and fairness. People seeking compensation from the trusts can similarly be expected to do so in the sunlight—especially when protecting against fraud today could preserve resources for those who haven’t yet begun to suffer and will need help in the future.